DUBAI, Dec 24 (Reuters) - Egypt’s bourse resumed rising on Monday after an early-session dip brought back buying interest among foreign investors, while trading in the Gulf was lacklustre and volumes thin because of the year-end lull.
Cairo’s index gained 0.2 percent to 5,373 points, and has risen in nine of the last 12 sessions.
The market fell on Sunday after voters approved a controversial new constitution for the country. But plenty of investors remain bullish about the medium term, even though the constitution may cause further political turmoil, and although the political instability has led Cairo to delay its request for a $4.8 billion loan from the International Monetary Fund.
“Technically, the market surprised by its resilience and immunity to disappointment on milestones that were supposed to be a catalyst - like the IMF loan,” said Mohamed Radwan, director of international sales at Pharos Securities.
The market plunged more than 7 percent in late November after President Mohamed Mursi expanded his powers and pushed through the drafting of the constitution, but the index is now back at pre-crisis levels.
“The market rebounded from the aggressive sell-off and swallowed the bearish news. The index faces resistance at 5,500 in the short term and at 7,000 points in the medium term,” Radwan said.
The market was open and showed little reaction when Standard & Poors’ cut Egypt’s long-term credit rating to ‘B-’ on Monday and said another cut was possible if deepening political turbulence undermined efforts to prop up the economy and public finances.
Orascom Construction Industries and Telecom Egypt each gained 0.7 percent.
In Saudi Arabia, the index declined 0.1 percent to finish at 6,881 points, down for a second session since Saturday’s six-week high.
Volatility was low as undecided investors awaited cues from fourth-quarter earnings and the 2013 state budget, from which investors are hoping for a boost in government spending.
“The market action is subdued today mainly due to uncertainty - people are waiting for the fiscal budget which is expected in a few days,” said Mohammad Omran, a Riyadh-based independent financial analyst and a member of the think tank Saudi Economic Association.
“If petrochemical companies’ earnings surprise on the upside, it will boost the market and the index could break the 7,000 level.”
Large-caps declined on Monday with the petrochemicals index slipping 0.3 percent and banking shares down 0.2 percent.
Elsewhere, profit-taking dragged down Qatar’s bourse for a second session from Thursday’s four-week high as banks declined.
Qatar’s market is among the worst-performing Gulf markets this year; it is attracting little interest despite a steady domestic economic outlook and attractive dividend yields.
Many investors have reduced exposure to the country, which has been moving more slowly than anticipated to develop infrastructure for hosting the 2022 soccer World Cup. Also, some analysts say Qatari companies may see relatively little benefit from mega-projects if they are too small to handle the deals.
Doha’s benchmark lost 0.4 percent on Monday to finish at 8,390 points, extending its year-to-date losses to 4.4 percent. Low trading volume exacerbated the situation.
“The market is trading in a range looking for a direction,” said a Doha-based trader. “It is hanging between the 8,450 resistance and the first, weak support of 8,370.”
Non-Qatari institutional investors are moving out of banks, and although local investors are accumulating some names in the sector, poor performance of banking shares is weighing on the market, the trader added.
Losers outnumbered gainers 13 to five on the 20-stock index. Masraf Al Rayan fell 1.4 percent and Qatar National Bank shed 1.0 percent.
In the UAE, Dubai’s index advanced 0.09 percent. Retail investors dominated with institutionals away, waiting for next year to start.
Ajman Bank extended gains, up 3.9 percent to 1.35 dirhams. In the last eight days it has climbed from around 1.10 dirhams on unconfirmed talk that institutions may buy a large stake in it.
Abu Dhabi’s benchmark climbed 0.3 percent to 2,638 points. It faces major technical resistance at 2,640 points, where it bottomed in mid-October and late November, and any clean break above this level would be at least short-term bullish.
Elsewhere, Kuwait’s bourse ended 0.07 percent lower.
* The index gained 0.2 percent to 5,373 points.
The benchmark slipped 0.1 percent to 6,881 points.
* The index slipped 0.4 percent to 8,390 points.
* The index ticked up 0.09 percent to 1,608 points.
* The index gained 0.3 percent to 2,638 points.
* The index declined 0.3 percent to 5,684 points.
* The index eased 0.07 percent to 5,959 points.
* The index gained 0.3 percent to 1,045 points.